Pre-Foreclosure Prices Hit New Low; Most Discounted States: RealtyTrac
By: Esther Cho May 31, 2012
For pre-foreclosure homes, which are residential properties in default or scheduled for auction, sales were at their highest quarterly level since the first quarter of 2009, according to RealtyTrac’s foreclosure sales report.
Pre-foreclosure sales, which are typically sold through the short sale process, accounted for 12 percent of all sales during the first quarter, an increase from 10 percent in the previous quarter and 9 percent a year ago.
Also, third party purchases for pre-foreclosures increased to 109,521, a 16 percent rise from the previous quarter and a 25 percent jump from a year ago.
On the other hand, third parties purchased less bank-owned homes compared to a year ago. With the number at 123,778 for REO homes purchased in the first quarter, the total is a 2 percent quarterly increase but a 15 percent decrease from a year ago.
REO sales accounted for 14 percent of all sales in the first quarter.
Pre-foreclosure homes sold for an average price of $175,461 in the first quarter, a 10 percent decrease from a year ago. The average pre-foreclosure sales price was the lowest in the history of RealtyTrac’s foreclosure sales report, which began in the first quarter of 2005.
REOs sold for an average price of $147,995 in the first quarter, down by only 2 percent from a year ago.
Pre-foreclosures sold at an average discount of 21 percent compared to non-foreclosures while REOs were discounted at about 33 percent.
Pre-foreclosure homes in the first quarter took about 306 days to sell after starting the foreclosure process, up from an average of 256 days a year ago. REOs that sold in the first quarter took about 178 days to sell after completing the foreclosure process.
In 27 states, pre-foreclosure sales increased including Wisconsin (94 percent), Michigan (81 percent), Georgia (80 percent), Texas (46 percent), and Illinois (46 percent).
For REO sales, 21 states saw quarterly increases including Oregon (41 percent), North Carolina (23 percent), Ohio (21 percent), Florida (13 percent) and Wisconsin (13 percent).
The states that had the highest share of foreclosure sales out of all residential sales were Nevada (56 percent), California (47 percent) and Arizona (40 percent).
Among the 20 largest metro areas, the biggest annual increases in pre-foreclosure sales were in Atlanta (78 percent), Detroit (75 percent), San Antonio (74 percent), Sacramento (70 percent), and Dallas (69 percent).
Metro areas that experienced the largest gains annually in REO sales were Minneapolis (33 percent), Boston (30 percent), Philadelphia (22 percent), Atlanta (15 percent), and Chicago (13 percent).